For Maxwell Ltd the correct general journal entry for a sale of $6600, including GST, paid for by the customer with a bank issued credit card, is:

Question

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The sale is $6600 including GST, so the revenue portion of the sale is only $6000 ($6600/1.1). Therefore, $600 needs to be credited to the GST payable account. Since the payment was made by a credit card, the bank account needs to be debited with the total amount of the sale, $6600. Therefore, the correct journal entry is DR Bank $6600; CR Sales $6000; CR GST payable $600.

For Maxwell Ltd the Correct General Journal Entry for a Sale